This is the HRMC tax scheme for foster carers called Qualifying Care Relief (QCR). It is a special tax scheme foster carers to work out if they have any tax to pay on their fostering payments, and involves a two-part calculation.
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The first element
- QCR is a fixed rate you are allowed tax relief on, which increases annually. Please ensure you use the correct year to calculate your tax
- Qualifying Care Relief for tax year 2023-24: £18,140
- Qualifying Care Relief for tax year 2024-25: £19,360
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This amount is available if you have been a carer for the entire tax year. If you have only been a carer for part of the tax year, the amount is calculated on a pro-rata basis from the date you were appointed in the year.
The second element
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The second element is a weekly child rate of:
- 2023-2024: £375 per week per child under the age of 11. £450 per week per child over the age of 11 (including any Staying Put young people)
- 2024-2025: £405 per week per child under the age of 11. £485 per week per child over the age of 11 (including any Staying Put young people)
Your total payments from your fostering service for the tax year (6th April to 5th April), include fee/reward payments, retainer payments, holiday or birthday allowances, mileage expenses and any other expenses/payments for the year
Your fostering service should provide you with an annual statement after the 5th April.
Note: Part week counts as a full week Note that a tax week runs from Monday-Sunday, so if a child arrives on a Thursday and leaves on Tuesday, that counts as two ' tax weeks'. There are 53 tax weeks in 2023-24
Calculating your tax using QCR
- Add together part 1 & 2. Your total fostering payments from your service and the QCR.
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If your total fostering income is less than your qualifying care amount for that year, then your taxable income is deemed as NIL - no tax to pay.
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If your income is over the qualifying amount, the excess is treated as your taxable income.
Personal allowance
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Every UK resident has a personal tax allowance.
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This is the amount of income you can receive each year, including any taxable profit from fostering, without having to pay tax on it.
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The personal allowance is in addition to the QCR threshold.
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The Personal Allowance for most people is £12,570 for 2023-24 (£12,570 for 2024-25) - you may need to check yours.
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If a foster carer has profit from their fostering, they still might not have to pay any tax if they have not used some/all of their personal allowance.
Exceptional expenses
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QCR does allow a foster carer to add to their QCR threshold if they are in receipt of any exceptional expenses. HMRC regard these foster carers as 'specialist foster carers'.
- If a carer looks after a child with a disability and buys specialist equipment, they may be able to make a claim by adding the amount to their fostering tax threshold. Receipts will need to be kept.
- HRMC’s guidance can be found here.
